Stark Cty. Treasurer ex rel. Ferrero v. Frustaci

Citation: 2011 Ohio 5094Docket: 2010 CA 00244

Court: Ohio Court of Appeals; September 30, 2011; Ohio; State Appellate Court

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Appellant Gary D. Zeigler contests a decision by the Stark County Common Pleas Court, which concluded that R.C. 321.38 does not infringe upon Article II, Section 38 of the Ohio Constitution. The case arises from Zeigler's tenure as Stark County Treasurer, during which his chief deputy, Vincent Frustaci, allegedly embezzled up to $2,964,560 from the treasury. Following these allegations, a special audit revealed significant unauthorized withdrawals equating to the embezzled amount. Frustaci later pleaded guilty to federal charges concerning the theft of $2,464,989. 

In July 2010, the Stark County auditor urged the prosecuting attorney to pursue legal action against Zeigler under R.C. 321.37 to recover the stolen funds, indicating that Zeigler held personal liability for a $1.5 million deficit despite a lack of evidence of his involvement in the theft. Zeigler did not respond to this request. Subsequently, a complaint was filed on July 28, 2010, in the Stark County Court of Common Pleas seeking recovery from Frustaci, Zeigler, and the sureties on Zeigler's bonds. The Stark County Board of Commissioners convened special meetings to discuss the Treasurer's Office's status in light of the prosecutor's pending actions. The appeal was dismissed, with the judgment entry dated September 30, 2011.

A temporary restraining order was issued by the Common Pleas Court to maintain the status quo for Gary D. Zeigler, who aimed to challenge the constitutionality of R.C. 321.38 regarding the removal of a county treasurer. Zeigler subsequently sought declaratory and injunctive relief in the Stark County Court of Common Pleas to prevent his removal, arguing that R.C. 321.38 was unconstitutional. The case was consolidated with a prosecutor's action under R.C. 321.37. On August 18, 2010, the board of commissioners resolved to hold a special meeting to review a Special Audit Report and determine if Zeigler had failed to settle or pay funds as required by law, which could lead to his removal under R.C. 321.38. Zeigler was notified and given the opportunity to be heard but declined to attend, asserting that the statute was unconstitutional and that the notice given was insufficient for a proper hearing.

On the date of the hearing, the trial court ruled that R.C. 321.38, when read alongside R.C. 321.37, did not violate the Ohio Constitution, and the due process concerns were addressed by the board's prior resolution. Zeigler's request for injunctive relief was denied. After the evidentiary hearing, the board found that a significant sum of money was missing from the treasury during Zeigler's tenure and voted to remove him from office, appointing Deputy Treasurer Jaime Allbritain as acting treasurer. Zeigler then filed a quo warranto action with the Ohio Supreme Court to regain his position. The appeal was stayed pending this action, and subsequent procedural motions were filed involving newly appointed treasurer Kenneth N. Koher, with an alternative writ granted by the Ohio Supreme Court.

On November 2, 2010, an election was held to fill the unexpired term of Zeigler, resulting in Alexander A. Zumbar's victory over Koher, leading to Zumbar's substitution as the respondent in the Supreme Court case. The Supreme Court addressed a quo warranto action on June 23, 2011, ruling that R.C. 321.38 is unconstitutional as it conflicts with Section 38, Article II of the Ohio Constitution by failing to require a complaint and hearing before a county treasurer's removal. The Court found that the appellant had no adequate legal remedy through an appeal from the common pleas court's judgment for declaratory relief, as it could not lead to the ouster of the respondent.

The stay in this matter was lifted, and the appellant's appeal was submitted for review, where the appellant argued that the trial court erred by declaring R.C. 321.38 constitutional and denying injunctive relief. However, the Court determined that the sole issue of R.C. 321.38's constitutionality had already been addressed affirmatively by the Ohio Supreme Court. Consequently, the Court dismissed the appeal from the judgment of the Court of Common Pleas of Stark County, Ohio, with costs assessed to the appellees.